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Code On Wages 2020

The document discusses India's wage code reforms and the Payment of Wages Act. It aims to extend legal coverage of minimum wages to all wage earners, establish a statutory floor wage to reduce disparities, and simplify the complex minimum wage structure. However, the current system has shortcomings. It may exclude certain workers and contractual arrangements. The rules do not provide clear criteria, methods, or periodicity for fixing floor wages. Enforcement can be improved through better awareness, use of data, and inspections.

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Vivek Mishra
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521 views8 pages

Code On Wages 2020

The document discusses India's wage code reforms and the Payment of Wages Act. It aims to extend legal coverage of minimum wages to all wage earners, establish a statutory floor wage to reduce disparities, and simplify the complex minimum wage structure. However, the current system has shortcomings. It may exclude certain workers and contractual arrangements. The rules do not provide clear criteria, methods, or periodicity for fixing floor wages. Enforcement can be improved through better awareness, use of data, and inspections.

Uploaded by

Vivek Mishra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction to Labour Code: Introduces the Labour Code highlighting its foundational acts including Payment of Wages, Minimum Wages, Payment of Bonus, and Equal Remuneration.
  • Wage Code and Reforms: Focuses on the objectives of promoting equity and labour welfare, establishing statutory floor wages, and simplifying wage structures.
  • Wage Rules and Shortcomings: Discusses the reforms needed for wage code improvements and highlights challenges in universal wage coverage and compliance.
  • Minimum Wages Coverage and Fixation: Explains the limitations in current minimum wage coverage and criteria for wage adjustment.
  • Enforcing Minimum Wages: Describes strategies for enforcing minimum wage laws including awareness campaigns, use of data, and inspections.

Code on Wages 2020

PGDM IMT G
Labour Code

Code on Wages
Payment of Wages
Act, 1936

Minimum Wages
Act, 1948

Payment of Bonus
Act, 1965

Equal Remuneration
Act, 1976
Wage Code and Wage Rules

To encourage investment
The manner and criteria of
and setting up of more
fixation, revision and
To promote equity and enterprises, on the other,
adjustment of floor wages
labour welfare (GOI 2019c) thereby catalysing creation
and the minimum rate of
of more employment
wages
opportunities (GOI 2019c)
Wage Code Reforms

Extension of legal coverage of floor wages and minimum wages to all


wage earners
• 224.7 million wage earners (or 48 percent of the total 468.8 million workforce)

Establishment of a statutory floor wage


• Reduce disparities in the minimum wage rates

Simplification and rationalization of the complex minimum wage


structure in India
• 1915 occupational minimum wage rates and 48 minimum wages in the central sphere
Wages Rules- Shortcomings & their Implications
Effectiveness
of minimum The scope of a universal coverage
wage policy
is contingent
The elements related to determining
the minimum wage level
The enforcement of strategy leading
to better compliance
Universal Coverage of Minimum Wages
Establishment Wage earners in the household and agricultural sector
could exclude

Exclude employers employing less than five workers for domestic or


agricultural purposes

Misses emerging category of workers and new forms of employment


relationships such as ‘gig and platform worker’ ; non-standardized
forms of working arrangements
Doesn’t include emerging contractual arrangements such as
‘concessionaire’ and ‘licensee’
Minimum Wage Fixation: Revision, Adjustment
& Criteria
Wages rules don’t outline the exact criteria and methods for fixation of floor wages
rates
Wages rules are not firm and categorical about the periodicity of revision and
adjustment of the floor wage
Wages rules don’t provide conceptual clarity regarding the “manner of calculating
minimum rates of wages”
No Criteria for setting the minimum rate of wages

Non-inclusion of economic factors for fixation of the minimum rate of wages

Procedure for the adjustment of dearness allowance


Enforcing Minimum Wages

Enforcement
Strategy Awareness-raising

Use of statistical information

Inspection system

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